Definition of Custodian

Custodian is A party responsible for managing an account for another party. In acting as a custodian, the individual or corporation must adhere to the prudent man rule and only take such actions as a prudent person would do for themselves.

Applying "Custodian" to Securities Exams:

Custodians are often referred to as fiduciaries, as they are appointed to act in another person’s best interest. All fiduciaries are guided by the Prudent Man Rule
UGMA and UTMA accounts are established for minors, as they are not legally allowed to open their own securities accounts. In both cases a custodian is appointed to manage the account according to the minor’s best interests. It is also worth noting that with both UGMA and UTMA accounts there can be only one custodian and one minor per account, though the number of donors permitted is unlimited.

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